Bankruptcy, Foreclosure Hit Hindu Temple
A Hindu Temple outside of Atlanta, Georgia filed Chapter 11 bankruptcy to stop foreclosure—and provides a clear example of the benefit that bankruptcy can provide.
The Hindu Temple of Georgia, located in Norcross, Ga., had defaulted on a $2.3 million bank loan, and was to be auctioned off in a foreclosure proceeding next week. By filing Chapter 11 bankruptcy, the temple was able to stop the foreclosure, and will be able to reorganize its debts.
Bankruptcy Chapters
Chapter 11 is one chapter of the U.S. bankruptcy law that covers businesses bankruptcies, and works similar to chapter 13 personal bankruptcy.
Businesses may also file for Chapter 7 bankruptcy, but as in personal bankruptcy, must liquidate, or sell of, its assets in order to pay creditors. A Chapter 11 bankruptcy allows the business to remain in operation while repaying creditors over time.
Bankruptcy Automatic Stay
The temple was able to halt the bank’s foreclosure actions due to the automatic stay, a court order that prevents creditors from taking any actions while the debtor is in bankruptcy.
According to the Atlanta Journal Constitution, The Hindu Temple of Georgia’s financial problems stemmed from allegations that its leader, Dr. Commander Selvam, was involved in a credit card scheme and was practicing medicine without a license. Both charges have been dropped, but the controversy has allegedly caused followers to stop attending the temple.
